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Appraisals Hard To Gauge

Traditionally, past sold data has almost always been better than current and pending inventory. Many times today the past sold data is outdated, predicated on a market we had last year.

In some subdivisions, there may be 80 homes on the market and 0 or 1 pending sales. There may be 0 sales in the last 4 months, making it difficult to use past data. And the new inventory may be priced less than the past sales, guaranteeing future sales will be at a lower price point.

Experienced agents must account for all of this and make a recommendation. In the end, the free market will always determine the value. Which buyers and sellers get there is another story.

The seller sets the price, and the market determines the value. If the price is out of line with the value, nothing good can happen for the seller. If it’s too high, it just sits there, perhaps going down in value as the market falls. If it’s too low, the seller just gave all the equity away to the buyer.

Correctly setting the price takes skill. No computer model has been able to do it.